Unable to satisfy the Director General of Civil Aviation (DGCA) and a consortium of 17 lenders about its revival plans, the Kingfisher Airlines management's efforts to reach out to the striking engineers and pilots to resolve the issue of pending salaries also failed to bring about a positive development.

The strikers have rejected the management's offer of one month's salary for now. As the deadlock persists the chances of the private carrier's resuming its skeletal services on Thursday as promised to DGCA and the aviation ministry have dimmed.

Kingfisher CEO Sanjay Agrawal, who had just returned from his meeting with DGCA Arun Mishra, tried to initiate talks in Mumbai by posting an e-mail. The DGCA has curtly told KFA to first pay its employees. The company is desperately short of funds. It has been pleading with the central revenue agencies such as Income Tax and Excise department to lift the ban on its frozen bank accounts. The service tax arrears have reached 80 crore rupees as the company struggles to raise funds for meeting its salary bill. (One crore is equivalent to 10 million)

This compelled the management to ask Agarwal to open a dialogue with the agitators. His e-mail reads like an informal invitation and not a concrete offer to discuss pending problems. He has asked those willing to join him for discussion at Qube, a KFA office, to understand the current status of the company. The striking engineers, pilots and ground staff refused to accept Agarwal's offer with a condition that it would take at least 10 days to pay one month's dues.

This irked the employees who stepped up their demand for clearance of all pending dues. The CEO refused to commit on further payment of salary dues that have piled up for seven months. About 50 per cent staff including engineers and pilots are unpaid since February this year. Tomorrow, industry sources say, the DGCA is expected to submit its report on the problems and future of KFA to the civil aviation ministry based on discussions with the CEO.

The agitation has worsened the financial woes of KFA. Aviation sources say the airline is suffering more than 8 crore rupees operational losses per day. The management has blamed losses on the deployment of a hugely depleted fleet. It is depending on barely 10 planes--seven Airbus A320 and three ATRs. The skeletal schedule was approved three months ago by the DGCA. The company CEO reportedly told the DGCA chief that the carrier has a fleet of 60 planes to revive its operation once the ongoing talks with prospective FDI investors fructify.

As the KFA's prospects of financial revival suffered, the lenders yesterday started working on disposing of the collateral pledged by the company. Selling Malya's villa in Goa and Kingfisher House in Vile-Parle would accrue barely 200 crore rupees. The lenders now want to lower KFA from “NPA to doubtful assets” in their books which is like giving up hope of any recovery.

Aviation sources say permission to fly again from today will be put on hold since the DGCA and aviation ministry have conveyed their serious concern over passenger safety. No flight can take off unless “certified safe” by the engineers and allied technical staff.